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1989 - 1890
La Fabrica de Cerveza de San Miguel was established as a brewery
San Miguel beer outsold all imported beers in the country
Production of Royal products, aerated water
Bottling of Coca-Cola
Purchase of Magnolia (start of ice cream business)
Produced yeast, dry ice, glass,
dairy products, cartons, plastics,
poultry feeds and fertilizers.
Set up of San Miguel
Hong Kong Brewery
San Miguel’s goal is to help people enjoy and make progress in their lives through the many products and services that our company offers. We want to give every customer and consumer we touch access to the best we can offer—whether in terms of quality, or affordability or choice.
Granted a Spanish company
the exclusive right to brew and sell beer
under San Miguel brand name
Sold minority interest in
Bought 49% interest in the Indonesian
brewer that produced second largest
beer brand in Indonesia
28% market share in Indonesia
Had manufacturing plants in
Hong Kong, China, India
Had licensing partners in Taiwan,
Guam and Nepal
San Miguel Purefoods
became the lasrgest food company
Purchased National Foods,
Australia's largest dairy company
Largest acquisition of San Miguel
Purchased 20% of Meralco
Acquired upto 50.1% stake in
Acquired 32.7% stake in
Liberty Telecom Holdings
Chief Executive Officer
San Miguel Corporation
Statement of the Problem
What business strategy should San Miguel Corporation use in order to continuously increase its market share and growth?
Statement of Objectives
1. To revisit San Miguel Corporation's goal and ensure that it continues to reflect the company’s overall business strategy.
2. To assess and reinvent San Miguel Corporation’s overall business strategy, enhance and continue vertical diversification athwart its interest for the growth of their market share.
3.To expand San Miguel Corporation’s market share, multiply its current scope, grow its products-services portfolio, and increase its sales.
Areas for Considerations and Assumptions
Expertise in the local market.
Vision is strong and aggressive to venture into new markets.
With good reputation in the business industry and with existing partnership with some big companies in the Philippines and other countries.
With enough capital to acquire different businesses as much as they want.
The company is strict with the quality of its products.
San Miguel Corporation is an ISO 9000 accredited company(Worldwide Quality Standards)
Expected slow growth rate.
Venturing on new types of business that the management is not familiar with.
Vulnerable to the changes in the political environment and dynamics in the country.
Unprepared to increase its international operations.
High exposure to sectors that are capital intensive market with low profit margin.
Would have to adapt to the different culture of its international partners.
Expansion of international market share in various Asian countries as well as to the European market.
The management team has good relationship with the Philippine government, particularly top level officials.
New corporate strategy will lead to a more valuable and higher-yielding business.
Its expansion will motivate its employees, especially the young managers.
Expanding in other Asian countries is less risky, more or less have the same business conditions with the Philippines and hence will not require drastic adjustment.
Near market saturation for alcoholic beverages due to new social trends, including healthy living mindset.
Availability of new international liquor brands in the local market.
Lack of knowledge regarding newly acquired businesses.
New aggressive player in the local market for beverages, packaging, and food industries.SMC employees are increasingly getting younger, more aggressive, and less reverent toward the company as an institution.
Will accumulate debts as SMC finances its business expansion.
Point of View
Porter's Five Forces
Porter's Five Forces
Alternative Courses of Action
Exported beer to HK, Shanghai
> Food Business
> Oil Refiner / Retailer Business
> Infrastructure Business
> Telecommunications Business
> Brewery/Beer Business
> Power Generation and
> Beverage Business
> Packaging Business
> Mining Business
SMC will continue its current business strategy of diversifying into non-allied businesses in the Philippines and at the same time pursue those which complement their current businesses.
SMC should further enhance its core products and continue to penetrate the international market and this time with their comprehensive strategy.
SMC should divest company shares with small or minimal profit and continue to diversify in the same industry of food, beverage, and packaging through regional acquisitions and integration and eventually move globally.
>Higher margin, higher growth industries will bring about growth in earnings.
>Related diversification will allow SMC to optimize its earnings and stretch its growth in the Food and Beverage industry.
>Spread risks among different industries. In this way, not all businesses will be affected by a seasonal slowdown.
>Risk that newly-acquired businesses may not generate expected income.
>Highly capital-intensive businesses may affect the competitiveness of traditional product lines.
>Company may stretch itself too thin administratively speaking by participating in various industries.
Expand into industries that are deemed highly prospective
Establish presence in these industries
Increase overall company revenue
Present a more comprehensive and consumer-oriented diversification
Streamline and rationalize financial and manpower resources
Know current performance of the company both allied and non-allied operations to include market share, growth versus previous meeting, projected sales and growth paths
Create plan in acquiring or investing into other complementary and non-allied businesses and know future acquisitions' benefit to the company and shareholders
Immediately communicate plans to stakeholders